IATA ranks Nigeria, Venezuela as countries with highest trapped funds

International Air Transport Association (IATA) Monday ranked Nigeria and Venezuela as two countries with highest number of airlines’ funds trapped in their countries.

This is coming at a time the clearing house for global airlines is engaging the Federal Government to ensure that issues with trapped funds are resolved.

Speaking at a press briefing in Abuja, Samson Fatokun, area manager, South West Africa, IATA, said international airlines’ funds in Nigeria as of March 2016 stood at $575 million, while Venezuela’s trapped airlines’ funds stood at  $3.6 billion.

He stated that Venezuela’s pending dollar disbursements to airlines had fallen to around $3.6 billion after the government released some of the funds held up by the country’s currency controls.

Airlines have for months struggled to repatriate revenue from ticket sales due to delays in both Nigeria and the South American nation’s 12-year-old exchange controls, with trapped cash peaking at around $4.1 billion over the summer.

As a result of the problem, international airlines resorted to selling their tickets in dollars because of their inability to access their monies trapped in the Central Bank of Nigeria (CBN).

International airlines normally sell their tickets in naira and then approach the CBN for the dollar equivalent to take back to their respective countries.

However, the CBN has in recent times been reluctant to give the airlines the dollar equivalent of their naira ticket sales at the official rate as the CBN seeks to conserve its fast dwindling external reserves for only what it considers essential imports or payments by Nigerians.

The result is that many international airlines have built mountains of naira cash, which they cannot take back to their countries.

Fatokun equally disclosed that IATA has visited the Nigerian government to express concern over the trapped funds and what the government is doing to get them released.

In a related development, vice president, IATA, Raphael Kuuchi bemoaned the high taxes imposed on air travel in Africa, saying the taxes were above global standard. He noted that if not tackled, the phenomenon might militate against the growth of the industry.